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Can tough economic conditions actually be a blessing in disguise for businesses?

Vincent Tang, Regional Vice President, for Epicor North Asia at Epicor Software | Aug. 24, 2016
Businesses can overcome difficult economic conditions by better planning and the deployment of agile technology.

This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.

While economic uncertainty is never a desirable situation, it's a fact that some of the world's greatest businesses have started during a downturn or recession.  Indeed, of the 100 companies listed on this year's Forbes America's Most Promising list, around a third were forged in the doom and gloom years of the global financial crisis.

How did these companies achieve extraordinary growth when others were in freefall?  In this article we'll take a look how businesses can overcome difficult economic conditions by better planning and the deployment of agile technology.

Industry challenges

While the wider economy struggles with uncertainty, the manufacturing sector in particular has stagnated. Indeed, last quarter it was reported that UK manufacturing has actually fallen back into recession for the third time in eight years. The woes of factories show no sign of abating after enduring 12 months of falling output.

A good proportion of this can be attributed to the difficult world economy with rising costs combining with reduced demand, the ongoing effects of the cutback in oil and gas investment and the steel crisis. On top of this, the UK vote to leave the EU raises long term concerns about growth of the global economy.

Economic cycles are a reality but the challenges and economic pressures on the manufacturing sector are distinctive to this part of the economy. This period of downturn is, however, providing opportunities for companies to emerge on top. 

Smart manufacturing

There are big changes happening in manufacturing through digital transformation. This fourth industrial revolution, or 'Industry 4.0' as it is commonly referred to, is explained as a way of increasing competitiveness through the convergence of the manufacturing process with technological and innovative applications and processes resulting in a merging of the virtual and physical worlds. 

McKinsey recently published a report which stated that the digital revolution is now breaching the walls of manufacturing as it continues to disrupt media, finance, consumer products, healthcare, and other sectors. It commented that "the explosion in data and new computing capabilities-along with advances in other areas such as artificial intelligence, automation and robotics, additive technology, and human-machine interaction-are unleashing innovations that will change the nature of manufacturing itself."

The problem is that manufacturing companies have traditionally been slow to react to the advent of digital technologies across the manufacturing value chain and operating model. While there are a few manufacturing companies that have made rapid advances in deriving significant benefits from digital software such as enterprise resource planning (ERP), their number is still small.

It's time for a new approach. Manufacturers should be working now to build an agile platform that will allow them to adapt to future customer requirements. Organisations that embrace the latest technologies - from mobile to scalable integrated platforms and from SaaS to next gen analytics - will be able to jump on the wave of economic recovery when it arrives.

 

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